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5 Stocks Under $10 Poised for Breakouts

Another under-$10 stock in the oil and gas complex that's moving within range of triggering a near-term breakout trade is
Forest Oil(FST), an independent oil and gas player engaged in the acquisition, exploration, development and production of oil, natural gas and natural gas liquids in North America. This stock has been smashed by the bears so far in 2012, with shares down by over 40%.

If you take a look at the chart for Forest Oil, you'll notice that this stock has been uptrending strong off its recent low of $5.68 a share hit in mid-July to its current price of around $8 a share. During that uptrend, shares of FST have been consistently making higher lows and higher highs, which is bullish technical price action. That move has quickly pushed FST within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in FST once it manages to break out above some near-term overhead resistance levels at $8.06 to $8.10 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 5.1 million shares. If that breakout triggers soon, then FST has a great chance of re-testing or possibly taking out its next major overhead resistance levels $9.15 to $10.81 a share.

Traders can look to buy FST off weakness with a stop that sits just below its 50-day moving average of $7.09 a share. One could also just buy FST off strength once it takes out $8.06 to $8.10 a share with high volume, and then simply use a stop just below $7.50 a share.